Financial news is displayed as people work on the floor at the New York Stock Exchange in New York, the U.S., March 4, 2025. /AP
Editor's note: Imran Khalid, a special commentator on current affairs for CGTN, is a freelance columnist on international affairs. The article reflects the author's opinions and not necessarily the views of CGTN.
Wall Street has seen countless selloffs, but few have been as drastic and far-reaching as the market rout of March 10. The Dow Jones Industrial Average plunged by 890 points, the S&P 500 tumbled by 2.7 percent and the Nasdaq nosedived by 4 percent, marking its worst day since September 2022. The magnitude of this selloff, wiping out months of gains, cannot be dismissed as a routine market correction. The stock market's downward spiral showed no signs of abating on Tuesday, as investors grappled with persistent economic uncertainty.
The Dow closed down 478 points lower, a 1.14 percent drop, after an earlier plunge of more than 700 points. The S&P 500 slipped by 0.76 percent, while the Nasdaq Composite dipped by 0.18 percent. Extreme volatility defined the day's trading, with the S&P 500 unable to shake off its losing streak, ultimately ending the session down approximately 0.5 percent.
Rather, this latest turmoil is the most alarming sign of a deepening crisis triggered by U.S. President Donald Trump's erratic economic policies, particularly his aggressive tariffs. At the core of this financial turmoil is a volatile and unpredictable trade policy that has unnerved investors, disrupted industries and cast a shadow over America's economic future.
The administration's decision to double tariffs on Chinese imports to 20 percent, impose a 25 percent duty on steel and aluminum and threaten a staggering 250 percent tariff on Canadian dairy products has sent shockwaves through global markets. These actions have not only rattled corporate boardrooms but have also fueled widespread fears of an impending recession.
Financial markets thrive on stability and predictability. However, Trump's tariff policies have introduced a level of uncertainty that Wall Street cannot stomach. Over the weekend, Trump's vague comments on the economy – refusing to rule out a recession and instead calling it a "period of transition" – only heightened anxieties.
Investors, already skittish over the unpredictable nature of his trade decisions, took his remarks as a warning sign of deeper trouble ahead. Tech stocks bore the brunt of the selloff, with companies like Apple, Microsoft, Amazon, and Tesla losing billions in market values. Tesla, in particular, saw its stock plummet by 15.4 percent amid investor concerns over CEO Elon Musk's ties to the Trump administration and declining European sales. Nvidia and Palantir, once the darlings of the artificial intelligence boom, saw sharp declines as well, underscoring a shift in investor sentiment from optimism to caution.
While Trump and his economic advisers continue to tout their "America First" trade agenda, the market reaction tells a different story. The selloff was not merely a response to recent tariff announcements – it was a referendum on Trump's broader economic stewardship. Investors are increasingly losing confidence in his ability to navigate the complex global trade landscape without triggering unintended consequences.
The yield on the 10-year U.S. Treasury bond dropped to about 4.2 percent as investors rushed to safe-haven assets, a classic sign of market distress. Meanwhile, the Cboe Volatility Index, popularly known as Wall Street's fear gauge, surged to its highest level this year, signaling that investor anxiety has reached a boiling point.
Traders work on the floor of the New York Stock Exchange, the U.S., March 11, 2025. /AP
It is not just the financial markets that are showing cracks. Layoffs are mounting, hiring is slowing and consumer confidence is deteriorating. Inflation remains a persistent threat and companies are scaling back investment due to tariff-induced uncertainty. The airline industry is already feeling the heat – Delta Air Lines slashed its first-quarter profit forecast by half, blaming heightened economic uncertainty under the Trump administration.
Perhaps the most striking aspect of this economic turmoil is its avoidability. Trump's tariffs were ostensibly designed to protect American industries, but they are having the opposite effect. By raising the cost of imported goods, these protectionist measures are increasing input costs for manufacturers, squeezing corporate profits and leading to higher consumer prices. The result? A toxic mix of inflationary pressures and declining demand threatens to stall economic growth.
The market meltdown of March 10 is a stark warning that Trump's trade war is more than just political theater – it carries real economic consequences. With every tariff hike, the administration risks further alienating global trading partners, disrupting supply chains and eroding confidence in the U.S. economy.
A recession, long dismissed by Trump's supporters as fearmongering, now appears increasingly likely. The stock market's loss of $4 trillion in value since mid-February underscores the severity of the situation. The question is no longer whether Trump's tariff policies will cause economic harm – it is how much damage they will inflict before a course correction is made.
Trump's economic policies have created a climate of uncertainty and fear – one that markets are now pricing in. For now, investors are left with little choice but to brace for more volatility, as the full impact of Trump's tariff gamble unfolds.
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